The Gig Economy’s Simmering European Front

Commentary

By: Eva Borbely

September 30, 2021 — Despite a number of well-reported legal decisions by national courts across Europe refuting the argument that gig-workers are self-employed independent contractors, it seems the majority of European governments have yet to make up their minds. With the exception of Spain – which passed legislation earlier this year guaranteeing employment status for all food and goods delivery workers – governments are still only making soft commitments and carrying out consultations to strengthen rights, but they are still far from a clear policy direction or proposed solutions.

This may change in 2022, as the debate heats up at the European level, despite labor and social policy being a predominantly member state competence, threatening gig economy growth prospects across the continent.

As we’ve written previously, we believe companies like Uber Technologies Inc. (UBER) face an increasing cost of doing business in Europe, as emerging national case law and legislation suggest that gig-workers are entitled to higher wages and social protections.

The European Parliament debated this thorny issue at the September plenary session in Strasbourg, and on the 16th voted in favor of a resolution for an EU directive affording people working for digital labor platforms the same rights as traditional employees. The debate was based on its own initiative report on “fair working conditions, rights and social protection for platform workers – new forms of employment linked to digital development.” According to its author, French MEP Sylvie Brunet, the resolution has three key aims:

1. The strengthening of social protections for platform workers, including the portability of rights when working for different platforms at the same time.

2. Transparency of working conditions, including transparency of algorithms and the introduction of rights of appeal and to consultation.

3. To advocate for platform workers to be able to organize for collective bargaining.

The vote (524 in favor, 39 against, and 124 abstentions) is non-binding, but it sends a very strong message to the jobs and social rights Commissioner Nicolas Schmitt, who is responsible for formulating platform worker legislation by the end of the year. Mr. Schmitt has already referred to the report as “inspirational” and the vote shows a strong consensus across parliamentary groups within the European Parliament.

There’s a lot at stake for gig economy companies in Europe, but one should never discount the lobbying power of tech companies. The common narrative—where new rules and better standards are publicly supported, but at the same time regulations are framed as a threat to innovation, flexibility, and consumers themselves— is a tried and tested one, even in Brussels. The European Commission has a history here. It notably spoke out in defense of gig-economy firms in 2016, when they were deemed to be “new internet-based services” facing undue restrictions across the single market. However, there may be less appetite to do so now when they are seen as “digital labor platforms” seen as exploiting people.